Sunday, April 30, 2006

Folks, I wanted this to be an extra-special fiftieth anniversary edition of the Carnival of the New Jersey Bloggers. I had all kinds of great plans for a themed carnival, featuring a song parody with links to all the submitted posts.

Two problems arose. One, my song parody just never came together. As a matter of fact, it sucked. Here's a sample, judge for yourselves:

Fifty Ways to Blog New Jersey1

The problem is all inside your head, she said to meThe answer is easy if you take it logicallyI'd like to help you in your struggle to be freeThere must be fifty ways to blog New Jersey

She said it's really not my habit to intrudeFurthermore I hope my meaning won't be lost or misconstruedSo I repeat myself, at the risk of being crudeThere must be fifty ways to blog New JerseyFifty ways to blog New Jersey

Refrain:Just leave her for him, Jim, get a new job, BobDon't try a new con, Jon, just listen to meTrip on the rug, Doug, don't need to discuss muchPump your own gas, lass, and get yourself free

The second problem is one every blog carnival host should face -- a whole mess of links. Getting them all to fit inside the confines of a single song would have been completely impossible, so I'll just do this the old-fashioned way. We've got a nice mix this week of regular contributors, old friends who've been away, and even friends we hadn't met yet. Let's start with them, after a nice glass of wine while we all get acquainted.

The New Folks

Several blogs were brought to my attention for the first time this week. As far as I can tell, these are their first visits to the Carnival. Please welcome them warmly and with many future links. First up is The Jersey Todd Show, a podcast blog covering the music scene. In Todd's own words from Episode 29, he's got "bands you've heard of, bands that you haven't heard of, bands you're absolutely going to fall in love with."Corzine Watch take's the governor at his word ("Hold me accountable"), tracking his promises vs. performance. Just yesterday, they covered gas station attendants, speed limits, approval ratings, and college tuition rates. It's amazing what the governor has influence over.Disconnect the Dots presents "OCD-enhanced analysis of the major flaws that surround us every day," and his submission this week explores the flaws inherent in today's internet.Finally, Schadenfreude of The Fifth Column("Bloggas with Attitude") chimes in with A Fistful of Pennies, in which money becomes an issue for some people.

The Prodigal Sons

A few folks who've visited, and even hosted in the past dropped by after long absences. Mr. Bingley of the Coalition of the Swilling starts us off by sharing his life experience with extreme punctuality. Two hours early for a first date?Dan Riehl, in the meantime, stops blogging national events and news long enough to notice New Jersey's Attorney General. I guess asking her to enforce the law is a bit of a stretch, isn't it?Next up is Steve Schippert, formerly of The Word Unheard. Steve has a successful new gig at Threatswatch.org, where their motto is "Supporting Security by Enhancing Awareness." Steve sends us a story about Stolen Honor Reclaimed, which is really a story about how milblogs are changing the landscape.

Joe also highlights the ACE Project, promoting alcohol awareness at Monmouth University. Joe's brothers in the fraternity are taking up a heavy burden trying to prevent acute alcohol poisoning, and should have gotten some recognition for their efforts. Joe's blog was the only media covering their kickoff event -- nicely done, Joe!

Karl in Atlantic City agrees with President Bush (and Fausta) about the national anthem -- sing it in English! Speaking of Fausta, she doesn't like Airbus' idea of standing up in an airplane for multi-hour flights. I can't say I blame her, those "seats" look more like vertical coffins with windows.

Surprisingly, Sharon and Enlighten don't agree on an issue of taxation. There's more to it than just taxation, but you need to read both posts to really understand the differences.

On the international front, Jane keeps up her relentless blogging for freedom in Yemen. If half of us worked this hard at our blogging, the newspapers would just fold up and go away.

I've got two final thoughts to leave you with. First, please read my post about the state's "hiring freeze." The numbers will send a chill up (and down) your spine. Then, stop by to see Mel for a good chuckle, and have a great New Jersey week!

Wednesday, April 26, 2006

Claim: The State of New Jersey is operating under a freeze on hiring, and is reducing state personnel to save money.Source, Budget in Brief, p. 1

Reduction of more than 1,000 staff positions with accompanying savings of $54 million through a rigorous hiring freeze, administrative efficiencies and responsible reorganization of select government functions. Limiting the filling of attrited vacancies will yield opportunities to not only control government growthbut also to do more with less by enhancing management efficiencies and streamlining services

Fact:Under Corzine's budget, the total number of people to be employed by the state in 2007 will be 1.5% higher than in 2006.

Supporting Data:According to the budget documents submitted by the departments, state employment for 2006 stands at 84,886. 71% are paid through direct state taxes, 16% using federal funds, and 13% using "other" funds. The budget documents explain that "Other includes positions supported by fees or other dedicated resources previously reported as State Supported." [This sounds like doublespeak for a shell game, doesn't it?]In 2007, the "state supported" headcount will drop by 1.0% (612 personnel). Those paid by federal funds will increase 4.9%, or 661 people, while the "other" category will increase by 8.5% -- 933. The net increase in state employment (and future pension liabilities, no doubt) is 1,331 more people.

Nearly every department increases its total headcount. Only three see decreases: Corrections, Personnel, and the Chief Executive. Those reductions total 164 personnel. The Public Advocate, State, and Community Affairs, on the other hand, each achieve double digit growth in their number of employees. Between them, those three departments add 220 people, more than eliminating the token reductions of other departments.

Proposal:A true reduction of 1,000 staff positions would mean a state workforce reduction of approximately 1.14%. I would propose that this reduction rate be applied to every department of the government.

My (admittedly broad-brush) plan would actually reduce the number of people the state has on payroll by 1,230 people, and is more than 2,500 fewer than the governor's plan. I don't believe that this is anywhere near enough to restore fiscal sanity to our state, but it is a step in the correct direction.

I don't like to hurl accusations of lying, but the governor's statement above reeks of untruth. This budget contains massivespending increases, unsupportable personnel increases, and blatant lies about the nature of the changes. As has been said before, a reduction in the desired rate of growth does not constitute a spending cut, and a plan which ADDS 1,331 people to the payroll cannot be reconciled with a claim of a "reduction of more than 1,000 staff positions."

It was a grave mistake for the people of New Jersey to place Jon Corzine in Drumthwacket.

Tuesday, April 25, 2006

Are you interested in submitting a post to be included in this week's Carnival? All you have to do is to send an email to njcarnival@gmail.com containing a link to one of your posts that you would like included in the Carnival. Or not, but maybe I might pick one of yours anyway. It's really much easier for me if you send me something, and your life should be centered around making my life easier.

Since this is Carnival # 50, I'd like to include at least 50 posts. If you've run across a new blogger from Jersey, please suggest to them that they submit a link.

If I do not hear from you by noon on Saturday, I will assume that you do not wish to be included this week. Don't do like I did last week and wait until 3 minutes before the deadline to submit a link. [Sorry, Anonymous B., but those darn Incas attacked my Greeks in Civ III and I just had to finish exterminating the filthy swine.]

The task ahead is daunting and not particularly attractive politically, for anyone. That said, the task must go forward -- no matter how tough the choices -- with a readiness to share the sacrifices.

I agree with the governor. Tough choices need to be made, but this budget does not make them. With a few notable exceptions like university funding, the governor has chosen to support the status quo of unrestrained growth. Take a look at the budgets requested by each of the departments (dollars in thousands):

Departments with increases will see an additional $3.1 billion in funding; cuts to individual departments total $493 million. A six-and-a-quarter to one ratio between increases and decreases doesn't seem much of a tough choice to me.

Maybe the tough choices become apparent when you look at what the departments requested vs. what the governor recommended to the legislature. Let's see:

Nope, no touch choices here. Twenty of twenty-two departments got exactly the tax dollars they demanded of the governor. Only Treasury (1.8%) and State (20.1%) saw reductions between their requested and recommended funding levels. Reducing the desired $4.8 billion dollars of growth by less than $350 million is more like tokenism than real fiscal management.

One last thought about the governor's "tough choices." According to the US Bureau of Economic Analysis, New Jersey Gross State Product grew 3.4% in 2004, and averaged 2.7% annually from 1997-2003. A budget which made tough choices would reduce growth in spending in at least one category, if not all of them, below the rate of economic growth. That doesn't happen here:

In this budget, overall spending grows at nearly three times the growth in our economy. It is irresponsible for the governor to make claims of fiscal responsibility when he proposes a budget that so far exceeds our means.

Saturday, April 22, 2006

I've been going through the details of the state budget, and found this interesting little tidbit of information. In the Budget in Brief (page 80), the governor took credit for a $28,000,000 reduction in one-time funding for UMDNJ. The detailed budget information for the Department of State (pp. D-348-51), however, shows that there's more to the story.UMDNJ is a huge business, with 2006 operating income projected at $1,166,984,000. In executing its operations, it expects to spend $1,402,723,000 this year, with a net cost to taxpayers of $235,739,000. The university proposed to increase its operating income (from fees, tuition, etc.) by 2.8%, and increase its general operating costs by only 0.3%, saving the taxpayers about $28 million. This seems like a very reasonable business case, and is the way a state enterprise should manage itself. Two-point-five percent productivity improvement is a pretty easy putt for an organization with over a billion dollars of income. When I worked for GE, the business expected each manufacturing plant to generate 4-5% every year.But the university, being a state institution, cannot run itself like a business. Included in its budget request was a separate line item, titled "Appropriation Funding Difference," calling for an additional $28 million in Grants-in-Aid. It appears that this is the $28 million in one-time expenditure reduction for which the governor took credit.Of course, UMDNJ didn't stop there. They also included separate line items for Increased Utilities Costs ($10 million), Capital Renewal / Replacement ($15.2 million), and Research Faculty Development ($5 million). Somewhere, either at State or in the governor's office, these additional funds were zeroed out. In addition, this year's general operating budget is being reduced to $1,386,375,000 (1.2%) for 2007.The net impact of these changes is significant - $79 million less than the school requested. Without those expenditures, the net cost to the taxpayer for each graduate of the university decreases by $47,000. Now if we can get rid of the remaining $151,266 per graduate, we'll be in really good shape.

Thursday, April 20, 2006

One area of the New Jersey budget where Governor Corzine has proposed significant growth is the Department of Children and Families (DCF). The summary of major increases and decreases from the Budget in Brief (page B-65) shows that the governor proposed to spend $50,364,000 more in 2006-07 than projected for current year state operations, plus $64,611,000 more in Grants-in-Aid for "Child Welfare Reform."

I was curious about the nature of the child welfare reform and its costs, so I did a little digging around, and found the DCF budget recommendations.

The Fiscal 2007 Budget for the Department of Children and Families (DCF) totals $974.8 million, an increase of $235.6 million in State funds over the fiscal 2006 adjusted appropriation of $739.3 million for the Department of Human Services’ (DHS) Office of Children Services.

This increase of $235,600,000 is broken down into 3 buckets -- $93,165,000 for direct state services, $132,397,000 for Grants-in-Aid, and $10,000,000 for Capital Construction. Within these three categories, expenditures are identified by program, as shown below.

Direct State ServicesChild Protective and Permancy ServicesPrevention and Community Partnership ServicesEducation ServicesChild Welfare Training Academy Services and OperationsSafety and Security ServicesAdministration and Support Services

Summing up the totals and looking at how the growth is distributed, it becomes clear that no "tough choices" were made to develop the DCF budget. Across the board, huge increases in spending are planned (click the table below to see).

The topline DCF budget is most disturbing, but not nearly as disturbing as this next little bit.In Child Protective and Permanency Services, the active caseload expected for 2007 is 58,100 children (page D-35), costing $9,565 for each child. In 2006, the caseload is 59,200 children, driving a cost per child of $7,211. Reaching back into 2005, the caseload was 64,300 children, and the actual spending was $7,453 per child. State spending for Child Protective and Permanency Services, on a per-child basis, has increased over 28% in the last two years, but goes up by nearly 33% this year.

Why the increased cost? Simply put, the program has added a significant number of staffers. In 2004, 3,450 people were employed by the CPPS program. That grew to 4,154 in 2005, and 5,059 in 2006. 2007 headcount isn't available in the budget, but DCF planned for nearly 10% growth in total filled positions, from 6,178 to 6,620. The department budget detail states (page D-36) "The Budget Estimate for fiscal 2007 reflects the number of positions funded and will be allocated by program class upon approval of a revised Child Welfare Reform Plan."

The story this document tells is staggering. The Department of Children and Families obviously does not intend to follow the governor's stated intention (BIB, page B-3) for

Reduction of more than 1,000 staff positions with accompanying savings of $54 million through a rigorous hiring freeze, administrative efficiencies and responsible reorganization of select government functions.

As evidenced by the budgeted personnel comment above, there is no plan (yet) to create a more efficient system of providing protective services for children. This is simply a plan to spend more of our tax dollars as quickly as possible.

Laquanya Agnew and Victoria Duncan share a desk, a love of reading and a passion for learning. But because of a loophole in the No Child Left Behind Act, one second-grader's score in Tennessee counts more than the other's. That is because Laquanya is black, and Victoria is white.An Associated Press computer analysis has found Laquanya is among nearly 2 million children whose scores aren't counted when it comes to meeting the law's requirement that schools track how students of different races perform on standardized tests.

This tone has carried over into the thoughts and beliefs of high school students.

"It's terrible," said Michael Oshinaya, a senior at Eleanor Roosevelt High School in New York City who was among a group of black students whose scores weren't broken out as a racial category. "We're part of America. We make up America, too. We should be counted as part of America."

If you are part of America, why would you want to be counted separately? Reporting of school test scores in the aggregate tells the system how the school is performing across the board, and allows the school teachers and administration to take action toward helping those students who aren't making the cut. As an individual, knowing the overall average and your own score tells you where you stand. Do you really need to know where you stand versus all the other kids of your own particular minority group? The whole point of NCLB was to force schools to measure their progress, not to serve as another tool for balkanization of the population.

The article does raise a valid point: there is variation from state to state on what is an appropriate group size to exclude from reporting requirements. Clearly, if a minority group in a school is statistically small, it should not be reported separately and used as a measurement of school performance. Take the extreme example of a single black student in an otherwise all-white school. Reporting the subgroup would reveal that one student's scores in a public record. The article spends so much effort on the racial angle, they don't get around to mentioning the state-to-state variation until the 18th paragraph.In the usual mainstream media fashion, the reporters choose only to share those bits of data that support their claims, and to portray them in the most negative light possible. Take this little tidbit, for example:

Less than 2 percent of white children's scores aren't being counted as a separate category. In contrast, Hispanics and blacks have roughly 10 percent of their scores excluded. More than one-third of Asian scores and nearly half of American Indian scores aren't broken out, AP found.

Restating the same data another way, 90% of black and hispanic students have their test scores reported in separate racial categories, in addition to being reported in the aggregate numbers. In other words (please forgive me for shouting), THE VAST MAJORITY ARE BEING REPORTED.

Not only are they being reported, but it's a good news story. I paid a visit to the National Center for Education Statistics, and pulled up data on 4th-grade mathematics on a national basis. What I found will never be printed in a mainstream media piece - since 1992, black student performance has been improving over 3% per year, compared with about 1.6% per year for white students. As can be clearly seen in the chart above, the situation is improving. And with 90% of the black student population being included in the reports, it's very difficult to argue that the increased performance is due to statistical manipulation. Note that the white, hispanic, and black lines all follow similar trends.

The collective liberal media wants us to believe that ours is a racist nation, and that we continually seek to put down minorities at the expense of the white majority. It will spin any piece of information to serve its agenda. It's clear, when you look at the data, that the chosen storyline doesn't hold water. Americans should be insulted that the liberal media thinks it can get away with such deception.

Tuesday, April 18, 2006

We often forget significant dates in our history as a nation, or the remembrance becomes clouded with modern changes. Yesterday, the Commonwealth of Massachusetts celebrated Patriots' Day, featuring the Boston Marathon and a Red Sox afternoon baseball game. I am aware of no other state that celebrated these events, but they must be remembered.To help jog your memory, please read Longfellow's Paul Revere's Ride, and remember:

Listen my children and you shall hearOf the midnight ride of Paul Revere,On the eighteenth of April, in Seventy-five;Hardly a man is now aliveWho remembers that famous day and year.

He said to his friend, "If the British marchBy land or sea from the town to-night,Hang a lantern aloft in the belfry archOf the North Church tower as a signal light,--One if by land, and two if by sea;And I on the opposite shore will be,Ready to ride and spread the alarmThrough every Middlesex village and farm,For the country folk to be up and to arm."

Then he said "Good-night!" and with muffled oarSilently rowed to the Charlestown shore,Just as the moon rose over the bay,Where swinging wide at her moorings layThe Somerset, British man-of-war;A phantom ship, with each mast and sparAcross the moon like a prison bar,And a huge black hulk, that was magnifiedBy its own reflection in the tide.

Meanwhile, his friend through alley and streetWanders and watches, with eager ears,Till in the silence around him he hearsThe muster of men at the barrack door,The sound of arms, and the tramp of feet,And the measured tread of the grenadiers,Marching down to their boats on the shore.

Then he climbed the tower of the Old North Church,By the wooden stairs, with stealthy tread,To the belfry chamber overhead,And startled the pigeons from their perchOn the sombre rafters, that round him madeMasses and moving shapes of shade,--By the trembling ladder, steep and tall,To the highest window in the wall,Where he paused to listen and look downA moment on the roofs of the townAnd the moonlight flowing over all.

Beneath, in the churchyard, lay the dead,In their night encampment on the hill,Wrapped in silence so deep and stillThat he could hear, like a sentinel's tread,The watchful night-wind, as it wentCreeping along from tent to tent,And seeming to whisper, "All is well!"A moment only he feels the spellOf the place and the hour, and the secret dreadOf the lonely belfry and the dead;For suddenly all his thoughts are bentOn a shadowy something far away,Where the river widens to meet the bay,--A line of black that bends and floatsOn the rising tide like a bridge of boats.

Meanwhile, impatient to mount and ride,Booted and spurred, with a heavy strideOn the opposite shore walked Paul Revere.Now he patted his horse's side,Now he gazed at the landscape far and near,Then, impetuous, stamped the earth,And turned and tightened his saddle girth;But mostly he watched with eager searchThe belfry tower of the Old North Church,As it rose above the graves on the hill,Lonely and spectral and sombre and still.And lo! as he looks, on the belfry's heightA glimmer, and then a gleam of light!He springs to the saddle, the bridle he turns,But lingers and gazes, till full on his sightA second lamp in the belfry burns.

A hurry of hoofs in a village street,A shape in the moonlight, a bulk in the dark,And beneath, from the pebbles, in passing, a sparkStruck out by a steed flying fearless and fleet;That was all! And yet, through the gloom and the light,The fate of a nation was riding that night;And the spark struck out by that steed, in his flight,Kindled the land into flame with its heat.He has left the village and mounted the steep,And beneath him, tranquil and broad and deep,Is the Mystic, meeting the ocean tides;And under the alders that skirt its edge,Now soft on the sand, now loud on the ledge,Is heard the tramp of his steed as he rides.

It was twelve by the village clockWhen he crossed the bridge into Medford town.He heard the crowing of the cock,And the barking of the farmer's dog,And felt the damp of the river fog,That rises after the sun goes down.

It was one by the village clock,When he galloped into Lexington.He saw the gilded weathercockSwim in the moonlight as he passed,And the meeting-house windows, black and bare,Gaze at him with a spectral glare,As if they already stood aghastAt the bloody work they would look upon.

It was two by the village clock,When he came to the bridge in Concord town.He heard the bleating of the flock,And the twitter of birds among the trees,And felt the breath of the morning breezeBlowing over the meadow brown.And one was safe and asleep in his bedWho at the bridge would be first to fall,Who that day would be lying dead,Pierced by a British musket ball.

You know the rest. In the books you have readHow the British Regulars fired and fled,---How the farmers gave them ball for ball,From behind each fence and farmyard wall,Chasing the redcoats down the lane,Then crossing the fields to emerge againUnder the trees at the turn of the road,And only pausing to fire and load.

So through the night rode Paul Revere;And so through the night went his cry of alarmTo every Middlesex village and farm,---A cry of defiance, and not of fear,A voice in the darkness, a knock at the door,And a word that shall echo for evermore!For, borne on the night-wind of the Past,Through all our history, to the last,In the hour of darkness and peril and need,The people will waken and listen to hearThe hurrying hoof-beats of that steed,And the midnight message of Paul Revere.

May these men never be forgotten. Without them, our nation never would have been.

I just ran across this post by Dr. Murray Sabrin, in which he presents the text of his testimony on the budget before the state Senate Budget and Appropriations Committee. He's got some interesting ideas about how to fix the state's budget problems.

On education funding:

• Amend the Constitution to abolish the “thorough and efficient” education clause, giving the Legislature control over school spending• Amend the Constitution preventing the Supreme Court from ordering the Legislature or the executive branch to spend money for any purpose

About the only way to get the Supreme Court out of the school funding business is to explicitly invalidate Abbott and prevent it from coming back.

• Equalize state education aid. Every school district would get the same state aid per student as every other school district

This one I really like. The only truly fair way for the state to fund education is by linking the money to the students, rather than the schools or districts. Of course, it introduces other problems like inflation of attendance records.

Tie this to the previous item. Give the individual student or his parents gets a voucher that can be spent at any school in the state. [My, I'm starting to sound like a Libertarian, aren't I?]

On financial management:

• The state should implement forensic accountants Rosenfarb Winters recommendations regarding the Abbott Districts, which would save at least $282 million

Kinda cryptic reference, but I like the idea of saving 9-figure numbers.

• Institute zero based budgeting—all state agencies must justify every dollar it spends

We do this today, except the justification is usually "That's what we spent last year, you got a problem with that?"

On specific taxes:

• Reduce the sales tax by one cent every year for three years

Like it, but I'd go for six rather than three years.

• Reduce the personal income tax and the Corporate Business Tax

This is good, as long as we reduce the marginal rates to stimulate growth, rather than creating some phony scheme that eliminates taxpayers from the rolls. Unfortunately, the Governor has proposed option B.

• Eliminate the income tax on pensions

I don't know that this is such a good thing (see above re: eliminating taxpayers from the rolls)

• Raise the gas tax 20 cents per gallon only for road and bridge projects

More than doubling the gas tax (or any other tax) is a Bad Idea™.

On redistribution schemes:

• Eliminate property tax rebates, saving $1.5 billion per year

Great idea, as long as it's enacted along with the linkage of funds to students.

• Eliminate all state grants to nonprofits

Makes sense to me. I don't want my money funding West Jepepian Cultural Studies or other such nonsense. Many nonprofits do good work, but they all employ professional fundraisers and should not be reliant on state grants. Fee for service paid to nonprofits, however, would probably be a more efficient use of state tax dollars.

• End municipal grants

I don't think that I would completely eliminate them, but I would like to see tighter controls and elimination of favoritism toward committee chair pet projects. Transparency would be nice here.

On specific spending items:

• Begin the transition making the state colleges, Rutgers University, and the University of Medical and Dentistry of New Jersey financially independent

Considering the facts that Rutgers charges $237 per undergraduate credit hour in state ($484 out of state), has 28,000 students enrolled, and requires 120 credit-hours of course work to graduate, one would think they could generate a viable business model without state funding. By my back-of-the-envelope calculations, they take in somewhere around $200 million annually from tuition alone, assuming an 80/20 split between in-state and out and 4-5 years to graduate.

• Kill the Transportation Fund bond issue

All for this one, as well. The debt liabilities in the TTF need to be taken out of hide, like they should have been when they were incurred.

• End state government grants, loans, subsidies for businesses• Abolish unnecessary business regulations

Absolutely. The state has no business in business. Set a low tax rate, keep it stable, get out of the way and watch things take off.

On general government reforms:

• Eliminate dual office holding

How the heck did we end up with this albatross, anyway?

• Eliminate pensions for part-time government employees

I spend at least an hour a year on paperwork for the benefit of the state, and in return I get a check. Is that enough to qualify me as a state employee for pension purposes?

• Eliminate pensions of legislators

I'm absolutely in favor of doing away with the permanent politician. Killing these pensions would remove a significant incentive for those in office to stay in office.

It's not surprising that Sabrin's ideas haven't gotten more attention, given that he was 51st on a list of 74 people testifying April 3rd, and has been a less-than-successful candidate for multiple statewide offices (Governor 97, Senate 00). I'll leave you with Sabrin's thoughts on the true source of our problem, with which I wholeheartedly agree.

The culture of entitlement and redistribution of income is so ingrained in the collective psyche of policymakers and many segments of the public, that few individuals can conceive of a society based on low taxes, less spending, less regulation, and limited government. Instead, too many of our citizens believe government’s prime responsibility is to be the social worker, the healthcare provider and the source of income for many of our families.Policymakers must embrace economist Ludwig von Mises’s insight: “The government and its chiefs do not have the powers of the mythical Santa Claus. They cannot spend except by taking out of the pockets of some people for the benefit of others.”

Friday, April 14, 2006

Governor Jon Corzine and his supporters claim his proposed $30.9 state budget for 2007 is a fair and reasonable plan while acknowledging spending will climb 9.2% over last year’s budget of $28.3 billion. No matter how you try to spin it, Corzine’s budget will increase state spending by $2.6 billion.

Corzine has explained $1.63 billion of the increase with his proposed $1.1 billion payment to the state worker pension fund and his request for a $530 million increase in property tax rebates. So where is the remaining billion dollars in additional spending going? It’s being spent on the Governor’s priorities.

Conveniently, the Governor's Budget in Brief provides a detailed list of different budget line items that have either increased or decreased. Enlighten pointed out a few highlights, but some summary data would also be useful to emphasize the magnitude of the problem.

State Operations - $268,887,000 increase

16 line items increased, totaling $690,608,000

39 line items decreased, totaling $421,731,000

Two of the decreases, totalling $125 million, allegedly shift costs to the federal government. Given that New Jersey typically gets back 57 cents on every dollar sent to the feds, I am highly skeptical about the opportunity here.Eighteen, for $108 million, come from "efficiencies" in each of the departments. There is no detail, as far as I can tell, about how the governor plans to make the bureaucracy more efficient. To gain efficiency in a business sense (our governor is a businessman, after all), we either have to produce more government services for the same cost, or produce the same government services for a lower cost. Enlighten points out that the state employs 154,700 people. 80,900 are full-time employees, which means that each full-time employee must produce an extra $1,340 worth of services to achieve $108 million in "efficiencies." At $40 / hour, that's 33.5 hours of extra work for each employee, or the equivalent of of 1,355 man-years of work. Think the unions will stand for that?Four items worth $95 million aren't really spending decreases, because they reduce fund balances (Prescription Fund, Division of Pensions/Pension Fund, Governor's Contingency Funds, and Contingency Funds). This exactly the kind of budget trick the governor told us he wouldn't use.Four line items, totalling $28 million, appear to be related to staffing reductions, including the governor's salary. It was so kind of him to sacrifice his $250,000 salary in the face of a $4,500,000,000 hole -- we're 0.0055% of the way there now!Finally, there's a one-time savings similar to the campaign funding Enlighten pointed out -- we are "saving" $600,000 by not funding the Governor's transition as we did last year.

Grants-in-Aid - $885,514,000 increase

36 items increased, totaling $1,708,960,000

76 items decreased, totaling $823,446,000

The governor finds more creative ways to give away our money. I suppose I should be encouraged by the $250,000 reduction to Weehawken Arts. The largest Grants-in Aid "reduction" is $215,000,000 attributed to the Hospital Provider Assessment. This is really a half of a new, $430,000,000 tax (Budget in Brief, page 6). Calling it a cost reduction is nothing more than a big fat lie.

State Aid - $1,007,679,000 increase

15 items increased, totaling $1,165,754,000

19 items decreased, totaling $158,075,000

The big increase, $744,117,000 to the Teacher's Pension and Annuity Fund, dwarfs all of the savings combined. Even excluding this pension funding, the increases are still more than 2.5 times the decreases. This is a "hard choices" budget? Hardly.

The bottom line, again from Enlighten New Jersey's post:

So it goes throughout Corzine's budget – a small cut here and a large increase somewhere else in his budget plan In the end, Governor Corzine has funded his priorities and his priorities are costing the state’s taxpayers an additional $2.6 billion.

In 1993, when President Clinton took office, the U.S. economy faced an enormous budget deficit. His response was twofold. First, he increased income taxes on the wealthiest Americans. Second, he increased the tax on a gallon of gasoline. To help poorer families pay for the higher gas taxes, he increased the earned income tax credit — a tax break for low-income households where someone works.

The result of these actions was the longest economic expansion in U.S. history. Unemployment dropped to below 4 percent, a level rarely seen in this country. And perhaps most important of all, a massive government budget deficit became a huge budget surplus, which has since been squandered by President Bush.

I always love it when liberals engage in the fallacy of post hoc, ergo propter hoc. It's even more fun when they include no data to support their assertions. Here's what Pressman leaves out. According to data from the Bureau of Economic Analysis, real economic growth was accelerating throughout 1993, from 0.12% in the 1st quarter to 1.35% in the 4th. In the 8 quarters leading up to implementation of Clinton's marginal rate increase, average real growth was 0.82% per quarter. In the 8 quarters following (Q1 1994 to Q4 1995), average real growth was 0.76%. The rate increase did not create "the longest economic expansion in U.S. history," it slowed an expansion already underway. Here are some handy charts to illustrate. The first shows real GDP growth from the BEA data linked above, while the second is the percentage of the population employed according to the Household Survey, from the Bureau of Labor Statistics.

As shown in the national data, increasing marginal income tax rates tends to suppress, not encourage, real economic growth. Pressman asserts that higher tax rates cause economic growth, which is demonstrably false. The rest of his argument for curing New Jersey's budget ills, based on this fallacy, doesn't hold water.

The only way out of this mess is to grow spending at a slower rate than we grow revenue. Until the governor proposes (and the legislature enacts) a plan that will constrain the spending side of the equation, we will never win.

Saturday, April 08, 2006

Much like prisoners awaiting execution, state lawmakers in recent years have spent budget deliberations waiting for last minute reprieves in the form of unanticipated tax collections.Last year, for instance, an unforeseen $1 billion increase in tax revenue helped legislators balance the budget without having to ax most property tax rebates or approve $150 million in proposed new taxes.But lawmakers are realizing that the reality of New Jersey's fiscal mess, coupled with the state's sluggish economy, offer little hope for a late spring windfall.That means that _ just as Gov. Jon S. Corzine has suggested _ they may have to actually cut programs and increases taxes as the July 1 deadline to approve an approximately $31 billion budget nears.

As usual, the NJ state legislature is hoping for some way to spend more of our tax dollars. In the article, Democrat Lou Greenwald, chairman of the Assembly Budget Committee, discusses his plan to reduce spending:

"What our goal will be is to find more waste and better efficiencies"

Pretty strong, isn't it? I can't wait to see how the Assembly finds more efficient ways to waste our money.Assembly Republicans aren't much better.

Assemblyman Joseph Malone, R-Burlington, wants to eliminate a state grant program that this fiscal year provided $3,000 grants for activities such as duck decoy carving, basket making and Indian music lessons."It may not be a lot of money, but it's symptomatic of the disregard that some people in state government have for the financial problems we have in the state of New Jersey," Malone said. "It's just incomprehensible."

I suppose it's progress to see an actual proposed cut, but couldn't they be a little more aggressive about it? I'd like to see some true reform, with a bold vision for change rather than sniping around the edges. For example, they could cap state spending on education at some percentage of Gross State Product. Any excess funds collected through the income tax could be returned to the taxpayers through annual "rebates" or even - perish the thought - rate reductions. Even if they set it at today's level, if they would distribute the funds equitably amongst the school districts we would generate huge benefits for most New Jersey property tax payers. Unfortunately, our New Jersey Republican Party doesn't have the intestinal fortitude to create, much less hold on to, any kind of vision.

Sunday, April 02, 2006

Jim at Parkway Rest Stop tells the story of Hector, inspired by the things he's been reading in the news. Amazing how a little dialogue can clarify an issue.My take on this is simple: in general, immigration is a good thing. We need to continually refill the melting pot of America with new materials, or we won't be able to sustain our growth and prosperity. It must, however, be done within the law, and towards the end of becoming American. Those who go outisde the system are violating our laws, and should not be rewarded for that violation. They have no "right" to the benefits earned by those with the determination to become citizens.

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About Me

Former Navy surface warfare officer & Battleship Sailor. Current Delanco New Jersey School Board member. Working in advanced concepts studies and analysis group for a large South Jersey defense contractor.